Airfare Index Research Data

Airfare Index Research Data

Commercial airlines offer a variety of discount fares to fill their flights, but these special
discount airfares, facilitated by internet commerce and “frequent flyer” programs, complicate efforts to
measure changes in the prices people pay for commercial air travel. To improve these measurements, the Bureau of Transportation
Statistics (BTS) and the Bureau of Labor Statistics (BLS) have research underway to develop an Origin and Destination (O&D)
Survey Airfare Index (see box). Some data from this ongoing research are presented here.

The O&D Survey index research data can be used to compare changes in prices among various cities. In one
comparison of three medium-size cities, a dip appears between 1995 and 1998 for flights originating in Colorado Springs, Colorado
(figure 41). This is a time during which the discount carrier Western Pacific operated flights from Colorado Springs and
indicates the effect it had on bringing airfares down before it withdrew from the market. The O&D Survey index can be used to
compare prices for international travel, as well. The third quarter spikes in a comparison of travel originating in Frankfurt, London,
and Tokyo indicate that a high percentage of passengers traveling to the United States from these cities pay peak fares July through
September (figure 42). These types of specific domestic and foreign points of origin comparisons are possible because of the size of
the O&D Survey sample on which the index is based.

The O&D Survey index can be compared withthe official BLS Airline fare index (figure 43). As the BLS index
covers only itineraries originating in the United States, it is most comparable to the O&D Survey “U.S. Origin
Only” series. However, these two indices give different results. For instance, between the fourth quarter of 1998
and the fourth quarter of 2000, the BLS index increased 17 percent, while the similar O&D Survey index increased only 13 percent.
This difference is probably due mainly to the O&D Survey index’s inclusion of special discount fares combined with
consumers’ increasing use of special discount tickets during this period. The more comprehensive O&D Survey index, which
combines U.S. and foreign flight origin data, rose even less (11.6 percent). The “foreign origin only” component increased
just 4.1 percent but fluctuates more over the period.